There’s no doubt that the rising cost of a college education, and the student loan debt that individuals and families are taking on to cover it, are hot-button issues right now.

But it’s worth remembering that the costs and benefits of different college degrees can vary widely; earning a bachelor’s and master’s in engineering might cost more than an associate degree in paralegal studies, but it will probably pay more, too.

We hear a lot these days about the crushing burden of college debt on today’s college graduates. But one thing that’s tougher than having to deal with the rapidly rising cost of college and skyrocketing student loan debt is the financial burden of not going to college at all.

A recent review of census data by the Pew Research Center found that college graduates make a lot more than less-educated workers, and that the gap is growing rapidly.

Shortly after meeting my husband, he tried to convince me that debt was a good thing. His student loans, after all, were not only funding his tuition but also many of our first dates. Using something called the “income smoothing theory,” he argued that it was better to borrow now, when we had little money, so we could live better than we otherwise would, and then pay it back later, when we (hopefully) had steady incomes. (Of course, to us at the time, living well meant being able to buy cheap Thai food and beer.)

While his theory falls apart if it’s taken to extremes, for the most part it makes sense. Debt can be a very good thing, as long as you use it wisely. Here are five ways you can use debt to improve your life.

For those of you expecting another installment of Scam Week, I thought we’d take a little break mid-week. I’ve been friends with Kim for a while and with her book coming out, I thought having a guest post by her would be a nice change of pace. I hope you enjoy it!

A few weeks ago I asked newsletter subscribers to email me with the things that concerned them. Many readers told me that the cost of higher education, specifically the college and university level, and their student loans were some of the things on their mind.

I’ve been doing research on the various reward catalogs of credit card companies when I discovered my favorite reward, a student loan rebate check from the Citi ThankYou Network, had gone up in price. I would routinely cite that reward as one of the main reasons I kept using my Citi card. A few short months ago, for 10,000 points, you could get a $100 check written to your student loan servicer. That came out to each point being valued at 1¢.(Click to continue reading…)

Rules of thumb are great. They teach you a little nugget of wisdom and have been vetted by generations of experience. Don’t swim thirty minutes after eating, don’t mix hard liquor and beer, and don’t date your relatives. Follow those rules of thumb and you’ll live a happy and healthy life.

The same can be said about financial rules of thumb. Don’t spend more than you earn, save 10% of your salary, and always buy a used car. You don’t have to always follow those rules of thumb, but if you want to achieve financial prosperity, it’s best to heed them.

However, over the years, some rules of thumb are in need of a refresher. Times change. A rule that made sense ten or twenty, or even a hundred, years ago may not make sense. Let’s have a look.(Click to continue reading…)

Earlier this year I finished writing an article in which I tried to find the salary breakeven point for private vs. public college graduates, a task that was impossible because I couldn’t find enough publicly available information at the time. I was trying to figure out whether college was “worth it” and if so, whether public or private college was a better value. Since I didn’t have enough data, I just took some “average student loan debt” figures and calculated the breakeven point.

In a recent Business Week article, they took a 2007 College Board analysis that showed college graduates earned 61% more than high school graduates over a 40 year career. Master’s degrees earn 93% more. It’s not the private college vs. public college debate but it’s certainly a good look at whether student loan debt, in general, is worth it.(Click to continue reading…)

I was amazed to learn that 25% of families don’t submit a FAFSA, which is the Free Application for Federal Student Aid, because they’re leaving free money on the table for no good reason. For those that do fill it out, be careful to submit it before your state’s deadline for state grants! The FAFSA deadline is June 30th but many states have earlier deadlines for state specific grants.